In an attempt to cut power purchase costs, Gujarat has invited tenders to buy coal-based electricity from independent power producers who would agree to sell power at less than Rs 2.82 unit.
Through the auction, Gujarat will transfer the coal allocated to power-generating stations owned by Gujarat State Electricity Corporation (GSECl) to more fuel-efficient private power plants. The reverse auction for procuring 1,000 MW of power through this mechanism would be held on September 8.
The successful power plant would be selling electricity to the state from October 1 to June 30, 2018. According to data from the Central Electricity Authority, coal-powered GSECl plants’ power sale price range between Rs 2.92 a unit-Rs 5.42 a unit.
If the power plant which wins the tender is located near the colliery itself, then the state can save on coal transportation costs as well. The average landed cost of coal for the seven coal-based power units of GSECl is about Rs 4,812 per metric tonne, of which half is accounted as transportation cost. GSECl has allocation from Korba coalfield in Chhattisgarh and Korea Rewa coal field in Madhya Pradesh in ratio of 80:20.
The move is expected to bring some respite to power plants, with a total estimated capacity of 28,000 MW, which do not have regular fuel supply arrangements with Coal India.